Health Care Insurance

[Jerilyn Klein Bier]

A number of the responents to the recent DealersEdge Health Insurance Survey expressed an interest in Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs). Has your dealership implemented an HSA or FSA? What has been your experience?

[MCausey]

Office Managers have told me that they have dabbled in these, but have found some surprising admin. headaches, especially toward the end of the year when employees are scrambling in the "use it or lose it" mode. Any office managers have good news or horror stories to share?

[jgiambalvo]

We started down this path two years ago with a FSA, which is just a pre-tax savings account that can be used for healthcare. You must use everything in the FSA by the end of the year or you will lose it. Last year we moved to an HSA. An HSA is a similar account but must be tied to a high deductible insurance plan. With an HSA, you do not lose your investment if you do not use it.
John

[MCausey]

Thanks John, this is helpful. We're working on an article now about HSAs and how employees can leverage them for retirement savings. If anyone has any experience there, we'd love to hear it. I'll report back to this forum, too, on what we come up with on this in the next few weeks. Thanks, Michael

[davedineen]

We offered a HSA option this year with our renewal on Health care(@130 employees)as a lower cost option and was surprised at the positive response. The employees that wanted "normal" health insurance could get it...but knew it was going to cost more. Those that wanted to save some money were happy to have an option. We keep our contribution the same for both plans.

I would suggest to use your insurance agency and your Bank in your employee meetings to help explain what an HSA is and how they work. I think this involvement helped with the credibilty of the program to the employees.

[Jerilyn Klein Bier]

Thanks to John and Dave for sharing their HSA experiences with us. How long did it take to implement your HSA programs and get employees onboard? Have you been able to quantify any savings yet?

Dave, your suggestion of getting the insurance company and bank to attend employee meetings to lend credibility to the program sounds like a good idea. Do employees also have customer service contact numbers/email addresses where they can address additional questions? Does a dealership employee serve as a liason?

John, are you still offering FSAs in addition to HSAs?

Jeri

[jgiambalvo]

We no longer offer the FSA since we adopted the HSA.

[MCausey]

For an innovative look at HSAs and some other more daring solutions to cutting employee healthcare costs, go to www.paulzanepilzer.com. We spoke with him in recent issues of Essential Office Manager, and he's got some interesting ideas about how to cut healthcare costs. If you have any questions you'd like him to address directly, drop me a note at jmcauseyj@aol.com and I'll try to get you an answer.

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[ssd]

We are in our second year with a FSA program in place. I find that many of our employees are afraid to utilize it because of the use it or lose it rule. I am the only employee using the dependent care, and we have maybe 7 out of 100 employees using medical expense.

Our provider is the same as our life/disability provider (American Fidelity) and they charge $3 per employee per month to run. You can also purchase insurance for possible employer losses, but we haven't and haven't had a problem.

[Jerilyn Klein Bier]

On May 18, the Treasury Dept. and IRS released a notice allowing employers to extend the filing deadline for FSA expense reimbursement by 2 1/2 months beyond the end of the plan year. Many employers plan to adopt this extension to give employees more flexibility. They need to educate employees that the use-it-or-lose-it provision will still kick in at the end of the grace period.